The attorney general of the United States, Alberto Gonzales, taking some blame for the spreading firestorm over fired U.S. attorneys; A powerful new vote of no confidence about the situation in Iraq; John Edwards takes on some new attacks against gays.

Aired March 13, 2007 - 16:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: Happening now, the attorney general of the United States, Alberto Gonzales, taking some blame for the spreading firestorm over fired U.S. attorneys. But Democrats who say the prosecutors were axed for political reasons, they want more. Also this hour, a powerful new vote of no confidence about the situation in Iraq. We're just minutes away from unveiling our brand new CNN poll numbers.

And John Edwards takes on some new attacks against gays in the military. And he takes on the conservative pundit Ann Coulter and the anti-gay slur she used against him.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Attorney General Alberto Gonzales is refusing to give in to calls for his resignation over the firing of eight federal prosecutors. But a short while ago, he took heat for errors in the ways that U.S. attorneys were let go.

(BEGIN VIDEO CLIP)

ALBERTO GONZALES, ATTORNEY GENERAL OF THE UNITED STATES: I acknowledge that mistakes were made here. I accept that responsibility. And my pledge to the American people is to find out what went wrong here.

(END VIDEO CLIP)

BLITZER: Democrats say the prosecutors were fired for political reasons and recently brought them to Capitol Hill to tell their stories.

But Gonzales still insists the dismissals were appropriate. He's vowing to find out why Congress was not told sooner that White House was involved in the discussions about who should be fired and when.

The White House disclosed today that the shake-up was first proposed by former White House Counsel Harriet Miers, who wanted to provide so-called fresh blood after President Bush's reelection. At least one administration official is paying the price for this controversy today. The Justice Department announced that Gonzales' chief of staff, Kyle Sampson, has resigned.

But on Capitol Hill, Democratic leaders want to look deeper into the Bush administration. They have their sights on hearings and on the White House deputy chief of staff, Karl Rove.

We have the latest on the showdown in the making.

Let's turn to our Congressional correspondent, Dana Bash -- Dana.

DANA BASH, CNN CORRESPONDENT: Well, Wolf, the anger here on Capitol Hill today really is palpable from Democrats and even loyal Republicans, who say they feel that they were lied to, or, at the very least, misled by the attorney general, by top Justice officials and by the White House. And now, of course, the big difference between now and just several months ago is that Democrats are in charge and they have the power to actually do something about this.

And today, they made clear they intend to.

(BEGIN VIDEO TAPE)

BASH (voice-over): A blunt warning from a top Democrat now in charge of the House Judiciary Committee.

REP. JOHN CONYERS (D-MI), CHAIRMAN, JUDICIARY COMMITTEE: The old days of the previous Congresses are over, Mr. President. And so we will get to the bottom of this crisis with or without cooperation.

BASH: Congressman John Conyers wants to know if the White House pushed to fire U.S. attorneys for political reasons and plans to question several Bush officials under oath, including the president's top political adviser, Karl Rove.

CONYERS: We have about six Department of Justice people and about four administration people, and Karl Rove would be one of them.

BASH: Since the beginning of the Bush administration, Democrats have viewed Rove as both political mastermind and master of dirty tricks. With e-mails suggesting he played a role in firing U.S. attorneys, Democrats see an opportunity to finally grill him.

SEN. CHARLES SCHUMER (D), NEW YORK: Karl Rove, we now know, was involved in the firings and lobbied for his own protege to take the spot of a respected U.S. attorney in Arkansas. Karl Rove should not wait for a subpoena. He should come before us immediately.

BASH: The White House says it will consider requests it gets from Congress, but history shows there could be a showdown looming. Rove is a top White House official, not confirmed by the Senate. And the president could refuse to let him talk to Congress, claiming executive privilege, like he did initially when then national security adviser, Condoleezza Rice, was asked to testify before the 9/11 Commission. Then, the White House only gave in after getting assurances from Congress her testimony would not be cited as precedent in the future.

(END VIDEO TAPE)

BASH: The chairman of the Senate Judiciary Committee, Patrick Leahy, said that he hopes that Bush officials, former and past, will testify or at least talk to the committee on their own. If not, he said that he is very clear he will subpoena them. And Senator Charles Schumer, the Democrat of New York, was asked point blank if those subpoenas would include Karl Rove, if he wouldn't come and talk to Congress on his own.

He said: "If I were the White House, I'd cooperate because this is going to hang over their heads and get worse and worse" -- Wolf.

BLITZER: We're going to have more, Dana, on this escalating controversy later right here in THE SITUATION ROOM.

Thank you.

Let's move on, though, to the war in Iraq.

Nearly four years of violent images are seared in the minds of Americans and they're clearly taking more of a toll than ever. We're releasing some brand new CNN poll numbers right now -- polls that show public opinion about the war sinking to new lows.

Are the American people ready to wave the white flag in Iraq?

We'll talk to our senior political analyst, Bill Schneider.

He's watching this story for us -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, the administration is pressing for time in Iraq.

Is the public willing to give it to them?

(BEGIN VIDEO TAPE)

SCHNEIDER (voice-over): The Bush administration and Republican leaders in Congress talk about victory in Iraq.

REP. ROY BLUNT (R-MO), MINORITY WHIP: While they're trying to figure out how to lose, we're trying to talk to General Petraeus about how to win.

SCHNEIDER: How do the American people assess the prospect of victory?

Only 29 percent believe the United States is winning the war in Iraq -- the lowest number ever. Slightly more, 37 percent, believe the U.S. will win the war. Most Americans don't think the U.S. will win.

Do people believe the U.S. can win the war?

They're split. They have not quite given up on Iraq, but their patience is running out. SCHUMER: The president has the power, in terms of military and foreign affairs, but we have one thing on our side -- the American people.

SCHNEIDER: What about the president's plan to send more troops to Iraq?

When the president announced the plan in January, 66 percent of Americans were opposed. Now, the plan is underway and supporters say...

SEN. JOHN MCCAIN (R), ARIZONA: There are some small glimmers of success already. Let's give it a chance.

SCHNEIDER: It looks like some people are willing to do that. Opposition to the troop build-up is a little less intense now than it was in January. Fifty-nine percent now oppose the plan. But the margin of opposition, 59-37 percent, remains strong.

One thing working against the administration -- 54 percent of Americans now believe the Bush administration deliberately misled the public about whether Iraq had weapons of mass destruction. That number has been going up steadily since the war began.

(END VIDEO TAPE)

SCHNEIDER: Only a third of the public believes President Bush should be responsible for setting U.S. policy in Iraq. Nearly half would rather have Congress determine Iraq policy.

But there are signs of impatience with Congress, too. Disapproval of the way Nancy Pelosi is handling her job as House speaker has gone up since she first took over in January, though more Americans continue to approve rather than disapprove of her performance -- Wolf.

BLITZER: All right, Bill, thank you.

Let's get some more now. The big picture on one of the most dramatic poll numbers in our new survey on the question, "Are things going well for the United States in Iraq?"

Check this out. In April, 2003, shortly after the U.S.-led invasion, 85 percent of Americans had an upbeat view of the situation in Iraq. As the year went on, though, opinion went downhill. By April, 2004, just 35 percent of Americans said things were going well for the U.S. in Iraq. That was the low point -- until now.

After ups and downs over the past two years, 29 percent of Americans now see the U.S. mission going well and that -- that is an all time low.

Remember, Bill Schneider and Dana Bash are part of the best political team on television. And for all the latest political news at any time, check out our Political Ticker at cnn.com/ticker.

Jack Cafferty is also part of that best political team on television.

He's joining us for The Cafferty File in New York -- those poll numbers not very good for the president's strategy in Iraq. The American people are not convinced things are moving in the right direction.

JACK CAFFERTY, CNN CORRESPONDENT: As opposed to being convinced they're moving in the right direction, the overwhelming number of Americans think we ought to get the hell out of there. That's, you know, and -- I mean it can't bode well.

I mean how long are we going to go through this exercise over there with no more results than we've seen?

In the meantime, the chairman of the joint chiefs is focused on another issue today, and he might be rethinking his decision to say these words. He's not backing down or apologizing for calling homosexual acts immoral.

General Peter Pace told the "Chicago Tribune" he supports the military's don't ask, don't tell policy that bans gays from openly serving in the military.

Pace says: "I believe homosexual acts between two individuals are immoral and that we should note condone immoral acts. So the don't ask, don't tell policy allows an individual to serve the country. If we know about immoral acts, regardless of committed by who, then we have a responsibility."

Pace compares homosexual acts to a service member having an affair with the wife of another member of the armed forces, something that is prosecuted in the military.

Meanwhile, gay advocacy groups are going nuts. They've demanded that he apologize, they've called his comments outrageous, insensitive, disrespectful to the 65,000 lesbian and gay troops now serving in the U.S. military.

In a statement released this afternoon, General Pace responded to all of this fallout over his comments. He said he probably should have focused more on his support of the don't ask, don't tell policy and less on his personal views.

That might have been a good idea.

So here's the question -- what's your reaction to the chairman of the joint chiefs calling homosexual acts immoral?

E-mail your thoughts on this to caffertyfile@cnn.com or go to cnn.com/caffertyfile.

And just a quick note to something we did on The File yesterday, Wolf. The powers that be somewhere in this vast broadcasting network posted the tape of the stuff we were talking about in reference to Alberto Gonzales on the Web page, cnn.com, and we are still getting e- mails about whether or not Alberto Gonzales ought to resign or get fired over this U.S. attorney thing. So a lot of people are being exposed to The File vis-a-vis the Internet. We're going high tech.

BLITZER: OK. Good. Good to note.

Stand by, Jack.

CAFFERTY: Well, sort of.

BLITZER: You'll be back soon.

Coming up, the billion dollar political battle over Iraq. Now, more of your tax dollars are at stake. We're going to go live to Capitol Hill to find out why.

Plus, John Edwards speaking out strongly regarding the attorney general, Alberto Gonzales. We'll find out what the Democratic presidential candidate has to say. He'll be joining us right here in THE SITUATION ROOM.

And later, what's going on between Barack Obama and Al Sharpton?

We caught up with the civil rights leader earlier today. We asked him about this war of words.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: House Democratic leaders are hunting for votes today for a war spending bill that includes a deadline for U.S. troops to leave Iraq. They're hoping to give members some incentives to support the measure, possibly billions of dollars worth of incentives.

Let's go to our Congressional correspondent, Andrea Koppel.

She has the bottom line for us -- Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Wolf, weighing in at a whopping $103 billion, the president's latest emergency war spending request was already the biggest he'd ever asked for. Now, that number has ballooned to $124 billion.

(BEGIN VIDEO TAPE)

KOPPEL (voice-over): Democrats say they added the extra $21 billion to fund other emergencies. Almost $3 billion would go to Gulf Coast recovery and rebuilding levees; another $4 billion to help farmers, including those hit hard in California and Florida.

Pennsylvania Republican Phil English voted with Democrats last month to oppose the president's troop surge, but now says Democrats have gone too far.

REP. ADAM PUTNAM (R), FLORIDA: I can't speak for anyone else. But I think it's safe to say that most of us -- most of the 17 who voted for the Democrats' resolution on Iraq are prepared to fight against. KOPPEL: House Republicans accuse Democrats of using pork barrel politics to win support for a bill that also sets a deadline for U.S. troops to withdraw from Iraq.

REP. PHILIP ENGLISH (R), PENNSYLVANIA: They have engaged in all sorts of horse trading to try and buy votes on the left and the right in their caucus, which will end up costing the taxpayers billions of dollars in unnecessary and unrelated spending to the troops' needs.

KOPPEL: Unrelated spending, like $1 billion to buy flu vaccines in case of a pandemic; $500 million to help Western states deal with wildfires; $400 million for low income heating assistance and $735 million for children's health insurance.

Democratic leaders say these are all worthy causes.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: What are they talking about is pork? are they talking about the money that we have in the bill for health care for the poorest children in America, legislation that has been asked for by both Democratic and Republican governors?

Are they talking about disaster assistance, which they have refused to give to America's farmers, who -- which is long overdue?

(END VIDEO TAPE)

KOPPEL: Now, the House Appropriations Committee is set to vote on this legislation later this week and if it passes, Wolf, it could land on the House floor as soon as next week. Democratic leaders, for the moment, are expressing cautious optimism they'll get the 218 votes needed to pass. But at this point, Wolf, every single vote is being pushed hard for -- Wolf.

BLITZER: We'll watch the vote counting together with you, Andrea.

Thank you.

A new shot of criticism, by the way, today for the House Democrats' push for this deadline in Iraq. And it comes in the pages of the "Washington Post," on the editorial page specifically.

Check out this except from this editorial in the "Washington Post": "Ms. Pelosi's strategy leads not toward a responsible withdrawal from Iraq, but to a constitutional power struggle with Mr. Bush, who has already said he will veto the legislation. Such a struggle would serve the interests of neither the Democrats nor the country."

That from the "Washington Post" editorial page today.

Coming up, the flap over fired prosecutors extending into the presidential race. Democratic candidate John Edwards -- he's going to join us. And he takes a stand, a very strong stand, against the attorney general. And upcoming next, snapshots of Senator Tim Johnson's recovery after brain surgery.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring all the wires. She's keeping an eye on the video feeds coming in from around the world into THE SITUATION ROOM and she's joining us now with a closer look at some of these important stories coming in -- hi, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf.

Hello to all of you.

You know, it's that sinking feeling again. Today, the Dow Jones Industrials closed down about 240 points. And that would be the second biggest drop of the year.

In other business news, U.S. retailers would like to play let's make a deal, if only they could get Americans to shop. Shoppers apparently are not shopping as much. Retail sales saw weaker than expected growth last month. The Commerce Department says retail sales rose by a feeble 1/10 of a percent. Retailers like Wal-Mart, J.C. Penney and The Gap had already reported disappointing sales at some of their stores.

Also, do you like watching "The Daily Show" with Jon Stewart, "SpongeBob Square Pants" or many other TV programs on YouTube?

Well, the owner of those programs says it's illegal for them to be there. Viacom is suing Google, which owns YouTube, for $1 billion. Viacom says nearly 160,000 of unauthorized clips of its programs have been available on YouTube and Viacom claims that's flat out copyright infringement.

It is a landmark visit. The head of the U.N. nuclear watchdog agency is in North Korea. Mohamed ElBaradei says he hopes to make progress on closing down a key atomic facility at the center of the North Korean nuclear program. It's the first time inspectors from the IAEA have been in that nation since they were expelled in 2002.

And these are the latest pictures of Senator Tim Johnson from his Web site. He suffered a brain hemorrhage in December. In a statement, the South Dakota Democrat thanks well-wishers for their prayers. He adds he has a long road ahead, but he is determined to return to the Senate.

Johnson was released from the hospital last month and is now in a private rehabilitation facility. His doctors say he is making significant gains.

That's a look at the headlines right now -- Wolf.

BLITZER: And he looks good in those pictures. And we, of course, wish him a very, very speedy recover.

Carol, thank you for that.

Tomorrow, the Senate, by the way, will be voting to begin debate on that new Democratic resolution that would begin redeploying troops from Iraq in just four months. The resolution is co-sponsored by Senators Harry Reid, Joe Biden and Carl Levin. But Biden is also running for president and he's using his campaign Web site to try to drum up support for the resolution.

Let's get some specific details from Jacki Schechner.

She's watching all of this -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Well, Wolf, Senator Biden has just launched a new Web site called endingthewar.com, to help gin up support for the resolution that he and Senator Levin helped draft, and that Senator Reid is going to introduce, or has introduced.

On this Web site, it talks about the plans for redeployment. Among the ideas is redeploying all combat forces by March of 2008. And even though this comes from Biden in his role as a senator, the actual new Web site is coming from him in his role as presidential candidate.

Biden's campaign tells us that the petition, the online petition signatures will be submitted to the Senate Foreign Relations Committee and then entered into the public record after a certain amount of time.

Biden has been using the Web to drum up support for his Iraq plans in specific Web sites, this one launched in October of 2006, called planforiraq.com. And then this Web site, called nomoretroops.com, was launched in January, just before the president's State of the Union Address -- Wolf.

BLITZER: All right, Jacki, thank you for that.

Up ahead, John Edwards -- is he trying to profit politically from being slurred by the conservative pundit Ann Coulter?

I'll ask him about that and a lot more. He'll be joining us right here in THE SITUATION ROOM.

Also, even in Mexico, the flap over those fired U.S. prosecutors dogging President Bush. We'll have a live report from our Ed Henry. He's traveling with the president.

We'll be right back.

(COMMERCIAL BREAK) BLITZER: Happening now, he's made some mistakes, but he won't resign. That's what the attorney general, Attorney General Alberto Gonzales, says. This amid calls for him to step down over the dismissals of several federal prosecutors, dismissals some Democrats suggest were politically motivated.

The top U.S. military officer says he believes homosexual acts are "immoral." The joint chiefs chairman, General Peter Pace, expresses his personal view in an interview with the "Chicago Tribune." But Pace now says instead, he's should have focused on the military's policy of don't ask, don't tell.

And the Reverend Al Sharpton says he wasn't looking for a fight, and yet he suggests he has one with Senator Barack Obama. All this after a news report claims that Sharpton is jealous of the Democratic Senator from Illinois.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Let's get some more now on the controversy regarding Attorney General Alberto Gonzales and the controversy over those words from the chairman of the joint chiefs of staff.

How is one presidential candidate responding?

And joining us now in Chapel Hill, North Carolina, his home state, former Senator John Edwards.

Senator Edwards, thanks very much for coming in.

FORMER SENATOR JOHN EDWARDS, PRESIDENTIAL CANDIDATE: Glad to be with you.

BLITZER: Let's talk about General Peter Pace, the chairman of the joint chiefs. He suggested today, his own personal opinion, homosexuality, he said, was immoral. As a result, don't change the don't ask, don't tell policy.

First of all, in your opinion, is homosexuality immoral?

EDWARDS: I don't -- don't share that view. And I would go -- go further than that, Wolf. I think the don't ask, don't tell is not working. And as president of the United States I would change that policy.

BLITZER: Is the don't ask, don't tell policy immoral?

EDWARDS: I think the don't ask, don't tell policy is wrong. It's not working. I think what it's done, effectively, is kept us from having some of the most talented people we could have in our military. It's caused -- caused more problems than it's solved. And it ought to be changed.

BLITZER: I know you've wrestled, because you've said it on several occasions, with the issue of gay marriage.

Tell our viewers whether or not you've come to some sort of firm conclusion whether you support the notion of gay marriage.

EDWARDS: I don't personally support it. But I very strongly support the idea of ending discrimination, of civil unions, of having substantive rights for partners. I think those rights are, in fact, civil rights, and I also might add, I don't think it's the -- it's the role of the government, the federal government, to tell churches what -- what marriages they should bless.

BLITZER: Well, what about in civil ceremonies? What's wrong, in other words -- why are you wrestling with the issue of gay marriage?

EDWARDS: Oh, just because of my own personal life and the culture and the place in which I grew up. It's -- I feel internal conflict about it. And to be perfectly candid about it, it's an issue that I continue to struggle with.

And I -- I think I am like a lot of Americans. I don't -- I want to end discrimination in this country. I want gay and lesbian couples to be treated fairly and with respect and with -- and with dignity.

And -- and I am very troubled about the idea that any president would impose their personal cultural beliefs on the country.

BLITZER: The conservative commentator Ann Coulter said this about you the other day. I will play a little clip for our viewers.

(BEGIN VIDEO CLIP)

ANN COULTER, AUTHOR, "GODLESS: THE CHURCH OF LIBERALISM": I was going to have a -- a few comments on the other Democratic presidential candidate, John Edwards, but it turns out that you have to go into rehab if you use the word faggot.

(END VIDEO CLIP)

BLITZER: That generated an angry reaction against her, not only from you, but from a lot of people. And you have raised some -- some money on your Web site as a result of that.

Tell our viewers what's going on.

EDWARDS: Oh, I think it's just a sad commentary on what's happening in American politics today, that anybody -- not just her -- anybody can make those kind of statements, and -- and draw a response.

I think America is better than that. Our political discourse should be at a much higher level than that. And I think it's also really important for not just me, but for others to speak out, when this kind of language is used, because forget about what she's saying about me. It's extraordinary -- extraordinarily derogatory about -- about a huge group of Americans.

BLITZER: Your critics, though, have said you're exploiting that for political purposes by raising money, so-called Coulter cash, on your Web site. Do you want to respond to those critics? EDWARDS: I hope that anybody and everybody will speak out in any -- whatever way they can. If they can speak out by -- by contributing to my campaign or to other causes that stand up against this kind of vile language, that's a good thing.

If they don't have to money to do it, and they can just speak out with their voices against it, that's equally important.

BLITZER: The Democratic Party, in the state of Nevada, was going to host the debate, together with the FOX News Channel. But you pulled out. They have subsequently canceled that whole debate.

Why did you decide to pull out, given the fact that, over the years, you have appeared as a guest on FOX many, many times?

EDWARDS: Well, first of all, we have got a whole series of debates planned in this presidential campaign -- debates, forums. I have been through this before, as you know, Wolf.

And I think we had 35 or 40 of -- of these debates and forums in the last presidential campaign. And we have a bunch of debates in Nevada, not just in general. And I didn't see any reason, under those circumstances, to give FOX a special forum. I think they have a long history in how they deal with Democrats, and how they talk about Democrats. And I saw them no reason to give them a specialized forum.

BLITZER: So, are you still going to be a guest on their various programs?

EDWARDS: I will make that judgment, as -- as the campaign goes on, as the occasion arises. But, on this particular case, I thought it was important for me to say, I am not going to be there.

BLITZER: You have issued a statement suggesting Alberto Gonzales, the attorney general, should step down. Correct me if I'm wrong. But do you believe he did anything illegal? Did he commit a crime? Why do you want him to step down?

EDWARDS: No. As I understand the law, what he did is not illegal.

The U.S. attorneys serve at the -- at the pleasure of the president of the United States. But what he did is wrong. And what they did is, they have fired a group of U.S. attorneys for what appear to be blatantly political reasons, particularly because they, Republicans, were complaining they weren't raising enough issues or prosecuting enough people for voter fraud, which, by the way, the subtext of that language, voter fraud, is voter suppression, which is what -- what we sometimes see from -- from the other side in these kind of occasions.

So, I think that what -- what he did was wrong. And I also might add, it's very troublesome that there's this pattern in the White House, that the White House itself and the top levels of the administration don't ever seem to take responsibility for anything. You know, Alberto Gonzales -- there's a problem; his chief of staff resigns. There's a problem in the vice president's office; Scooter Libby takes the fall.

I mean, when is somebody who is actually at the highest level of this administration going to take responsibility for something?

BLITZER: What do you want the president to do?

EDWARDS: I think Alberto Gonzales ought to be gone. He ought to either be -- he ought to either be removed or he ought to resign.

BLITZER: The president should fire him?

EDWARDS: One or the other. He needs to be gone. And either the president should get rid of him, or Gonzales should resign.

BLITZER: Let me ask you a question on a story that's moving on the Associated Press now of a new book coming out later this year by Bob Shrum, one of the top Democratic strategists. He worked on the -- the Kerry-Edwards campaign, as you well know, back in 2004.

He's suggesting that you were pressured into voting for the authorization for the war in Iraq, despite your instincts, because you wanted to -- to get elected, get reelected, and you -- and you had politically -- you did it for political reasons.

You want to comment to what Shrum apparently has written in his memoirs?

EDWARDS: Well, I haven't seen what -- what Bob Shrum said. I will just speak for myself.

There was a lot of pressure on the question of what we should do about the -- the vote on the war in Iraq. But the pressure wasn't political. The pressure was trying to do what's right. And I have said many times that not only was I wrong about the intelligence, as were -- as were most of the people who voted for the war, but I also was wrong in the judgment to give this president the authority.

And no one else is responsible for that. I'm not asking anybody else to be held accountable or responsible. I am accountable for it. And I have said what is the truth for me about it.

BLITZER: You have apologized, and you have said it was a mistake; is that right?

EDWARDS: That is correct.

BLITZER: Senator Edwards, thanks very much for joining us.

EDWARDS: Thanks, Wolf. Thanks for having me.

BLITZER: And coming up; video you must see to believe: whales gone wild. We are going to show you what can happen when man messes with the world's biggest mammals. Plus: our "Strategy Session." Is a constitutional showdown simmering between President Bush and the Democratic-controlled Congress? Will Congress subpoena the president's top aides over the U.S. attorneys firing fiasco?

All that coming up -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Now to a story that has many people in Washington speculating, and some others worrying.

The alleged Washington madam has struck a deal to turn over client records to a media organization.

Let's turn to CNN's Brianna Keilar -- Brianna.

Unfortunately, we don't have Brianna Keilar. We are going to get to Brianna Keilar shortly, and bring you that.

In the meantime -- let's go to Brianna Keilar. We now have Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Wolf, the civil defense lawyer for Deborah Jean Palfrey says his client has picked a media organization to give the contact information of up to 15,000 of her former clients to.

Her lawyer, Montgomery Blair Sibley, won't say which outlet inked the deal, but that it will become obvious when stories identifying Palfrey's clients start coming out.

Sibley says at least some of the names of men who engaged in sexual acts with employees of Palfrey's company will be revealed. And he claims no money is changing hands in this agreement. Palfrey, of course, is accused of running a large-scale prostitution ring in the Washington, D.C., area from 1993 to 2006.

She pleaded not guilty Friday to federal charges of racketeering and money-laundering. And, because of the ongoing legal proceedings, an assistant U.S. attorney working this case would not comment on what the government might be doing to prevent Palfrey from distributing this contact information of her former clients -- Wolf.

BLITZER: Thank you, Brianna, for that.

We will watch this story.

Up next in our "Strategy Session": The attorney general, Alberto Gonzales, takes responsibility for firing those U.S. attorneys. Should he resign?

And pointed words over Iraq by the Reverend Al Sharpton for Senator Barack Obama -- is the civil rights leader's endorsement up for grabs?

We're covering the bases. Terry Jeffrey, Bill Press, they are standing by live, right here in the "Strategy Session."

We will be right back.

(COMMERCIAL BREAK)

BLITZER: President Bush is in Mexico right now. He's vowing to push for changes in the immigration laws of the United States.

But the traveling White House is keeping tabs on the growing furor back here at home over those fired federal prosecutors and charges they were axed for political reasons.

Our White House correspondent, Ed Henry, is traveling with the president. He's joining us now live from Mexico.

What's the reaction to this uproar here in Washington, Ed?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, I just got out of a briefing, on-camera briefing with Dan Bartlett -- Bartlett, the White House counselor -- as you can imagine, the president trying to talk about his Latin American trip, trying to get out the message that the U.S. cares about the abject poverty here.

But this briefing was dominated by more than a dozen questions to Dan Bartlett about this unfolding story about the U.S. attorney. Specifically, Bartlett was pressed about the fact there are calls now for the resignation of Alberto Gonzales, the attorney general.

Bartlett said he still has the full confidence of the president, and that the president believes the decision to remove seven U.S. attorneys was the right one, and was not based on political considerations.

I did press Bartlett on the point that the White House has been saying these were made for management reasons, but one of those prosecutors in New Mexico had actually been highly rated by the Justice Department.

(BEGIN VIDEO CLIP)

DAN BARTLETT, COUNSELOR TO PRESIDENT BUSH: The issue of U.S. attorneys, as many of you know, these U.S. attorneys serve at the discretion of the U.S. president. Many of these U.S. attorneys have served four-year terms.

There was a management review process. And there was a determination made to remove seven U.S. attorneys for cause. And the members of the Justice Department had been sharing that information, the particulars on each of those cases, as to why those U.S. attorney were removed, which was completely within the managerial discretion of the attorney general, and something that the president supported.

(END VIDEO CLIP)

HENRY: Now, of course, the next battle may be about who will be testifying on Capitol Hill, with Democrats now running Congress, all kinds of talk about hearing -- hearings and investigations, and whether or not top White House aides, like Karl Rove, will testify.

Dan Bartlett was asked about that, and said that it is -- quote -- "highly unlikely" that Rove and other White House aides will testify -- that, of course, because of the precedent that, if you're a -- a White House staffer who is not confirmed by the Senate, you, typically, do not have to testify on Capitol Hill.

But, obviously, as you can manage, the political pressure from Democrats will be mounting -- Wolf.

BLITZER: Thanks very much, Ed Henry, on the road for us in Mexico today.

He may have made mistakes, but the attorney general, Alberto Gonzales, says he's not going to resign, despite some calls for him to step down.

Here to discuss that and more in our "Strategy Session," radio talk show host Bill Press and Terry Jeffrey, the editor at large at "Human Events."

Guys, thanks very much...

BILL PRESS, RADIO TALK SHOW HOST: Hi, Wolf.

BLITZER: ... for coming in.

They serve at the pleasure of the president. He wants them out, they got to leave. It's -- the -- the White House says as simple as that.

PRESS: Yes, but, Wolf, look, this is a political purge.

In fact, in the beginning, the Justice Department said they were dumped for political reasons. Then, they later come back and said, no, there was mismanagement.

They have shown no examples of mismanagement, no proof whatsoever. This was orchestrated at the White House by Harriet Miers, we know from "The Washington Post" this morning, and Karl Rove. I think it's a black mark on -- on this administration. And I -- it's not the first. You know, you got the NSA spying and all the other stuff that's gone wrong at the Justice Department.

I think Gonzales is the most political attorney general that we have seen since John Mitchell, and he ought to step down.

BLITZER: More than Ed Meese?

PRESS: Even more than Ed Meese. I think Ed Meese did his job as attorney general. But, with this one, there's politics, not justice...

BLITZER: All right.

PRESS: ... that's playing. BLITZER: Terry?

TERRY JEFFREY, EDITOR, "HUMAN EVENTS": Well, the truth is that U.S. attorneys are political appointees. We learned that famously, Wolf, early in the president -- in President Clinton's administration, when he removed all 93 of them at once.

The president can put people in the U.S. attorney position, as long as he gets them confirmed by the Senate, and take them out, who comport with his philosophy. He has a right to remove them.

There is a question, though, about whether the Gonzales Justice Department was ham-fisted in the way they handled it, and the way they have handled the aftermath of it.

PRESS: But you know, to take...

(CROSSTALK)

BLITZER: Hold on one second...

PRESS: Sure.

(CROSSTALK)

BLITZER: ... because I want to follow up on that point, because I remember. I covered the Clinton White House in '93...

PRESS: Right.

BLITZER: ... when Bill Clinton took office. And all 90-plus U.S. attorneys...

(CROSSTALK)

BLITZER: ... were asked to submit their resignations, which is the right of the president. And he accepted, and he then decided who -- whom to pick.

PRESS: But I think there's a big difference. When you're coming in as a president, you have got a right to appoint your -- to name your administration.

What George Bush did here, and -- and Karl Rove, is to cherry- pick that the ones that they didn't like. And, down in Atlanta, they cherry-picked a guy, dumped him out, just to put Karl Rove's deputy in there. Now, tell me that wasn't political.

JEFFREY: Well, should...

BLITZER: Terry?

JEFFREY: ... should they keep in office the ones that they don't like and remove the ones that they do like?

Clearly, U.S. attorneys are a political position. Rudy Giuliani's political career was started when he was named as a U.S. attorney in New York named by President Reagan. Giuliani still gets a lot of mileage out of that. The fact of the matter is, U.S. attorneys are political, period. That's the truth.

BLITZER: Why did Alberto Gonzales decide that his -- one of his top aides, if not his top aide...

PRESS: Sure.

BLITZER: ... had to go?

JEFFREY: Well, that's a good question. I think we -- we could use some more information about who knew what in the Justice Department and when, because it does seem like Alberto Gonzales is a little bit out of the loop in his own Justice Department.

PRESS: Well, this thing smells, Wolf. It smells of politics. It smells of people.

Even -- even the -- the prosecutor in San Diego who put Duke Cunningham in jail loses her job, and then the guy in New Mexico gets all the calls from Pete Domenici and Heather Wilson because he's not going after enough Democrats. It was purely political. And that's -- they should not be dumped...

BLITZER: What...

PRESS: ... for -- for pure partisan political reasons...

(CROSSTALK)

BLITZER: If Democratic chairmen of various committees up on the Hill decide they want to subpoena Karl Rove, other White House officials, current and former, what should the president do?

JEFFREY: Well, it depends on what the predicate of the subpoena is.

I -- I think that the White House should be completely forthcoming about the facts that people know what the truth is, lay their cards on the table, and -- and play it that way.

BLITZER: Let's talk a little bit about this feud between the Reverend Al Sharpton...

PRESS: Right.

BLITZER: ... and Barack Obama.

We're going to have a full report on this coming up in the next hour.

But what do you make of these -- I don't know if they are nasty, but sort of blunt talk that Al Sharpton has delivered against -- against Senator Obama? PRESS: I think that Al Sharpton unwittingly has handed Barack Obama his Sister Souljah moment, that this is really going to help Barack Obama, you know?

And I sort of feel sorry for Al Sharpton. He ran in 2004. He did pretty well, gained a lot of respect. He was going to run again this year, or at least be a major player this year. This was his year. And then here comes this upstart from Illinois that nobody ever heard of, who has suddenly stolen all of Al Sharpton's thunder.

BLITZER: But -- but a lot of our viewers probably don't remember what Bill is talking about.

JEFFREY: Well, that -- that's when Bill Clinton went after certain elements of black culture for not being up to American standards. And he -- he got credit for it, rightly so.

But I think that Al Sharpton here is wrong about Barack Obama. I don't think Obama is taking the black vote for granted. I think you have seen other black candidates, for example, Michael Steele, who ran for Senate in Maryland, who did not get a majority of the vote.

He started out in this campaign with Hillary Clinton leading among the black vote. He's been campaigning in the black community, and he's been gaining traction there and elsewhere, quite frankly, because he's a very attractive candidate.

BLITZER: It's a -- he is a very attractive candidate. And he's doing amazingly well for a guy who has only been in the -- in the national limelight for two years.

PRESS: Yes. Again, and, if you're Al Sharpton, you have got to resent that. You have got to feel a little jealous about Barack Obama.

And March madness, with a political twist -- one presidential candidate has come up with his own racket over the NCAA brackets. Our I-team explains.

Stay with us. You're THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Former President George Bush got a standing ovation last night just for showing up at a speech in Los Angeles. You may remember, as we reported yesterday, he had a fainting spell Sunday while playing golf in 93-degree heat.

Here's what the former president joked about last night. Listen to this.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: And, the next thing I remember, I was coming out from -- from -- I had fainted, and I was on the floor. And the ugliest part was, my dear friend from Las Vegas, Sig Rogich, was giving me mouth-to-mouth resuscitation.

(LAUGHTER)

G.H.W. BUSH: We had about six beautiful girls there, and there was Sig.

(LAUGHTER)

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: The former president was hospitalized overnight, after being treated for dehydration.

And, as you can see, Jack Cafferty, he is doing just fine. We're happy about that.

JACK CAFFERTY, CNN ANCHOR: You know, it occurs to me that sense of humor is not necessarily genetic, is it?

(LAUGHTER)

CAFFERTY: He's a -- he's a pretty funny guy.

BLITZER: He -- he's a funny guy.

CAFFERTY: Yes, he is.

BLITZER: That was pretty good.

I don't know if you know...

CAFFERTY: It was.

BLITZER: Do you know Sig Rogich?

CAFFERTY: No.

BLITZER: You want those six beautiful girls, those showgirls, giving you mouth-to-mouth resuscitation, not Sig.

CAFFERTY: ... which doesn't exactly get us to the question of the hour. So, you will forgive me for a rough transition.

But the question is: What's your reaction to the chairman of the Joint Chiefs of Staff calling homosexual acts immoral?

Aaron is Columbus writes: "How is it General Pace can speak so authoritatively about immoral sexual acts, but he can't speak as authoritatively about an immoral war? Nineteen- and 20-year-old kids dying a world away over the president's vendetta and in a civil war we have no business in, and he wants to talk about sex. When you put your life on the line, like those soldiers are doing every day, you should be able to sleep with whomever you want to."

H. writes from Windermere, Florida: "I think General Pace is right. I also grew up in an America where we were always told that homosexuality is wrong."

Brett in Chicago: "Finally, a Joint Chiefs chairman who says what most of Middle America actually thinks. Homosexuals only make up about 8 percent of the U.S. population. So, why do the remaining 92 percent of us feel we have to go to extreme lengths to make them feel all warm and fuzzy? I listened to Peter Pace's entire statement, and his comments were sober and intelligent."

David in Alameda, California: "The general's moral compass seems to be spinning, indeed, stuck on sexual triviality. Has he no questions about wars of choice, thought to be immoral since the Dark Ages?"

Terry in Kernersville, North Carolina: "I would think the chairman of the Joint Chiefs would be focusing on Iraq and how to protect our troops, rather than wasting his time on an issue that does not require all this attention. Let's try and keep our soldiers from getting wounded, so they don't have to come home and be hospitalized at Walter Reed."

Gene in Moundville, Alabama: "Leave the general alone. It's like a breath of fresh air to hear someone in Washington express an honest opinion without dancing around political correctness."

And , finally, Lynne in California writes: "If the don't- ask/don't-tell policy is in effect, how do we know there are 65,000 homosexuals in the military? Who asked? Who told?" -- Wolf.

BLITZER: I don't know. Don't know the answers to those questions, but we will...

CAFFERTY: I don't either.

BLITZER: We will work on it.

Jack, thanks very much.

It's March madness time. And one presidential candidate is going public with his NCAA tournament picks. That would be Senator John McCain. He's hosting a March madness contest on his own campaign Web site.

Here with his picks, our Internet reporter, Abbi Tatton -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, we have seen candidates trying to lure people to their Web sites with video and Webcasts, but brackets? New at JohnMcCain.com, make your own NCAA picks. If you get it right, there is some McCain merchandise in it for you.

Though, perhaps more interesting is McCain's own bracket, which is now online -- the campaign saying putting this online lets people see another side to Senator John McCain.

Now, luckily -- we will see what he has got -- luckily, he didn't have to make any tough choices about any primary states -- no teams from Iowa or New Hampshire in the tournament this year. He is expressing some support for some swing states here. There's Ohio State. And, also, he picks Florida over his own Arizona Wildcats.

McCain's own pick for winning, he has North Carolina, something that McCain and Democratic presidential hopeful John Edwards can probably agree on -- Wolf.

BLITZER: Thank you, Abbi.

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